Glossary — Tax
MTD ITSA
HMRC's digital tax-filing regime for landlords — quarterly updates through MTD-recognised software from April 2026 if qualifying income tops £50,000.
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Definition
MTD ITSA stands for Making Tax Digital for Income Tax Self-Assessment — HMRC’s digital tax-filing regime requiring landlords and sole traders with qualifying income over £50,000 to keep digital records and submit quarterly updates through HMRC-recognised software, starting April 2026.
The threshold drops to £30,000 from April 2027 and (per the current legislated plan, as of May 2026) to £20,000 from April 2028. The qualifying-income test combines gross rental income and self-employment income — not profit. Joint owners apply the threshold to their individual share of the gross income.
In detail
Under MTD ITSA, landlords must use software that is HMRC-recognised for MTD filingto submit quarterly summaries of property income and expenses, plus an end-of-period statement and a final declaration. Records must be kept in a digital format — the “digital records” rule explicitly excludes paper ledgers and most spreadsheets without bridging software.
LandlordFlow supports the record-keeping side: digital records by property, MTD-shaped income and expense categories, accountant-ready exports. LandlordFlow is not an HMRC-recognised MTD filing tool. The actual quarterly submissions are made by your accountant or by a separate filing tool that pulls from your LandlordFlow records.
Late or missed quarterly updates carry a points-based penalty regime — points accumulate per missed submission, with a fixed £200 penalty once a threshold is hit. The exact mechanics are set out in Schedule 24 of the Finance Act 2021 (as amended).
Some landlords are temporarily out of scope: those whose qualifying income is under £50,000 (until April 2027), those with no UK property or trade income, and a narrow set of formal exemptions for landlords who cannot use digital tools.
See LandlordFlow handle MTD ITSA in practice
25-minute walk-through of how LandlordFlow tracks compliance certificates, financial records, and the MTD readiness layer.